CAIRO: Egypt’s main stock indexes slid over 4 percent on Thursday as the market reeled on global market woes, with Eastern Tobacco tumbling over 8 percent, traders said.
The benchmark CASE 30 index shed 4.77 percent to 7,066.21 points, while the Hermes index lost 4.95 percent to 630.30 points. The broader CIBC index plunged 7.46 percent to 363.11 points.
Traders said foreign investors were selling heavily after the collapse of Lehman Brothers and a sale of Merrill Lynch to Bank of America, followed by the US bailout of insurer AIG.
“We are having a domino effect in the world equity markets, said Mohamed Kotb of Jazira Asset management. “We are seeing a minimization of the equity portfolios.
Shares in Eastern Tobacco, the most heavily traded share by turnover, dipped 8.42 percent to LE 261 Egyptian ($47.64). The firm had said on Sept. 1 that it had raised prices for some types of cigarettes.
Market heavyweight Orascom Construction Industries lost 4.4 percent to LE 303.21, while Orascom Telecom shed 6.35 percent to LE 39.98.
Egypt’s benchmark index had dipped to its lowest level since March 2007 on Tuesday as foreign hedge funds sold big caps, spurring retail panic, brokers said. The market recovered some losses on Wednesday before again turning downward.
Mohamed Seddik, a senior analyst at Prime Securities, said investors were also waiting for a decision of the Egyptian central bank’s monetary policy committee. The market has been expecting the bank to raise rates to combat surging inflation.
A decision is due on Friday, and traders said that some investors were being drawn away from the equity market by the expectation of higher interest rates.
Stock exchange data showed that foreigners were net sellers by LE 31.9 million, with local investors also net sellers. Arab non-Egyptian investors were net buyers, however, by LE 48.2 million.
The negative sentiment also hit Egypt’s banking sector. Investment bank EFG-Hermes dipped 8.03 percent to LE 36.30, while Commercial International Bank ended 3.04 percent lower at LE 39.53.
Real estate developer Talaat Moustafa plummetted 17.92 percent to LE 5.13. Court sources said on Thursday that the former chairman Hisham Talaat Moustafa would go on trial on Oct. 18 over accusations he paid a man to kill a Lebanese singer in Dubai in July.